Consumer Trend and Behaviour in FMCG Industry
The Fast-Moving Consumer Goods (FMCG) Industry is the fourth largest sector in the Indian Economy. Household and personal care products accounts for 50% of the sales in the industry, healthcare accounts for 31-32% and food and beverage accounts for the remaining 18-19%.
The size of the fast-moving consumer goods (FMCG) Industry in India is estimated to be around USD 230.14 billion in 2023. The FMCG industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 27.9% from 2024 to 2030, reaching USD 1288.50 billion by 2030.
FMCG products are an integral part of everyday instant consumption of people in their daily lives and are easy to find and purchase.
They are available in a variety of sizes and formats to meet the needs of different consumers.
The consumer behaviour in FMCG sector is being impacted by digital transformation, changing consumer preferences related to health and sustainability, the rise of e-commerce and the balancing act between brand loyalty and product experience.
Post-Pandemic Shifts
- There's heightened awareness about hygiene, driving demand for cleaning products and health-centric FMCG items.
- Consumers have developed habits of bulk buying and maintaining home inventories which clearly is Stockpiling Behavior.
- Products catering to home- based lifestyles, like healthy snacks and beverages, have become a part of everyday life, as Gen-Z and new mothers prefer hybrid work.
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Major consumer trends and behaviours shaping the FMCG sector
Health and Wellness
- Demand for Natural and Organic Products with consumers increasingly opting for products that are free from artificial ingredients, preservatives and chemicals
- Products offering health benefits, such as immunity boosters , probiotics and fortified foods.
- Growing shift toward plant based and vegan products driven by health consciousness and sustainability concerns.
Sustainability
- Brands that use recyclable, biodegradable or reusable packaging
- Emphasis on transparency about supply chain practices, with consumers favouring ethically sourced ingredients
- An Example which will inspire us towards adoption of sustainability during manufacturing is of ‘Anomaly’ – a haircare line of products focussing on natural ingredients and eco-friendly packaging, achieving a turnover of 4000 crore in a short span of time.
Digital Transformation
- The rise of online shopping platforms has made convenience a key factor in consumer decision making
- Regular delivery services through subscription models for everyday essentials are becoming popular in tier 1 and tier 2 cities.
- Brands are leveraging social media, personalized marketing and influencer collaborations to connect with tech savvy consumers even in the villages.
Convenience
- Ready-to-eat and easy-to- use products (On the Go Products) are high in demand.
- Meal kits and single-serve portions which are Time Saving Solutions appeal to busy lifestyles.
- Consumers expect seamless access across physical and digital retail channels (Omnichannel Availability)
Value Consciousness
- Consumers seek premiumquality products at reasonable prices experiencing Affordable Luxury for the very first time.
- Store-brand products i.e Private Labels are gaining popularity due to multiple factors like ease of availability, customized product composition & its effectiveness.
- Economic uncertainties push consumers to seek better deals and discounts (Smart Spending)
Personalization
- Products catering to individual needs and preferences such as skincare customized for different skin types, are gaining popularity giving Tailored Experiences.
- Brands are adapting their product portfolios to meet regional and cultural tastes providing Localized Offerings
Technology-Driven Innovations
- QR codes and NFC technology (Smart Packaging) on packaging enable consumers to access product information easily.
- Brands use AI (AI and Data Analytics) to predict consumer preferences and further improve supply chain efficiency.
- Virtual try-ons and immersive brand experiences enhance customer engagement.
Social and Ethical Values
- Consumers are drawn to brands that contribute to social causes.
- Representation of Diversity and Inclusion in advertising and product offerings is essential for brand loyalty today.
- Ethical labor practices and fair wages Fair-Trade resonate with socially conscious buyers.
Indulgence and Experience
- High-quality, niche, and artisanal products i.e Premiumization are appealing to consumers seeking indulgence.
- Unique flavour's, packaging, & brand stories are leading to experience - driven purchases that enhance the consumer journey
